Turkey’s economy has nothing but promise ahead, as it continues to improve aspects of its business system. With Turkey’s current economic conditions, strengthening policies, regulations, currency, legal system, and favorable market conditions, future economic growth is certain, and the country possesses the human resources and infrastructure to support such growth. Turkey certainly represents a profitable and hospitable environment welcoming to new business.
In continuing this economic, legal, and business progress, the country will become even more enticing for FDI, stability will continue to increase, and risks ; early mover benefits will continue to decrease. Turkey Case Study In today’s increasingly globalized business climate, maintaining position is often considered as a failure as goal oriented companies focus on increasing market share and expanding the market. With increasing technology and decreasing political and economic barriers, global markets represent targets of opportunity (Hill, 2008, p. 11).
Despite the receptiveness of many foreign markets to new goods and services, companies must still consider many cultural, legal, socio-economic, political, and risk related issues in order to successfully operate in foreign territories. With over half of its population enjoying the contemporary westernized lifestyle, modern Turkey is quite similar to many developed countries; its major cities and business centers, farmland, and coastlines closely mirroring population dispersion found in countries such as the United States and Great Britain (Infoplease, 2008, p.1).
Turkey’s economic and business climate and recent improvements appear to make it a solid option for foreign direct investment. Several factors come into play when assessing the validity for investment, as discussed subsequently. Turkey’s population is 99. 8% Islam, and 0. 2% Christian ; Jewish, with a national literacy rate of 87. 4% (Infoplease, 2008, p. 1). The country possesses a modernized infrastructure system, though some rebuilding is needed, and a support for the free market system.
At face value, Turkey appears to be a solid investment option, possessing the culture, structure, systems, and vehicles necessary for successful business operation. From a religious perspective, text contained in the Koran is supportive of business and the free enterprise system; supporting, in fact the free market system over other economic structures. (Hill, 2008, p. 103). There are additional expectations of business however, that Milton Freidman certainly would not endorse. The Koran favors ethical business practices, exercising Corporate Social Responsibility, and stresses charitable activity (Hill, 2008, p.
104). Socio – Economic Attributes: Again, Turkey’s population possesses an 87. 4% Literacy Rate (Infoplease, 2008, p. 1). It possesses modern infrastructure, and is dedicated to maintenance and upgrade, as demonstrated by its Increasing budget for public investment in the past years (Infoplease2, 2008, p. 6). This increased budget has realized improvements in new highways, airports, and other critical infrastructure to business. Turkey is a middle income nation, in transition from an agricultural base to a country with more diversified offerings, primarily in global services (Infoplease2, 2008, p.2).
In 2001, Turkey experienced a significant economic decline, but with the assistance of World Bank and the International Monetary Fund and their financial structure guidance and involvement, Turkey’s economy emerged more viable than before, stronger and more stable (Infoplease2, 2008, p. 2). Turkey’s deficit was subsequently reduced, and reforms were implemented in such major sectors as financial, energy, telecommunications, etc; and the country saw a shift toward increased privatization (Infoplease2, 2008, p. 2).
This entire period saw a systemic reduction in economic vulnerabilities, set the platform for the following five years’ sustained 7. 5% growth annually, and was a major factor in the increase of Foreign Direct Investment. As a result of these changes, Turkey’s per capita GDP is currently nearing high income levels according to a World Bank study (Turkey Defence ; Security Report, 2008, p. 49). Hill (2008) defines Purchasing Power Parity as “an adjustment in gross domestic product per capita to reflect differences in the cost of living”.
p. 59. Purchasing Power Parity is used to strip away misleading exchange rates, inflation factors, cost of goods, and other differences between countries to allow a viewer to make an apples to apples comparison between countries. For perspective, below are figures taken from a 2007 World Bank study regarding Purchasing Power Parity. Turkey is approximately equivalent with Mexico in this category, but possesses the business climate, human resources, location, and policies to far exceed the level represented by current data.